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Is it legal for a merchant to subscribe a person to a service, and start charging them periodically, without that person's explicit agreement?

For example, suppose Netflix happens to have your credit card number, but you are currently not purchasing anything from them and have no membership. One day Netflix releases a new $10/mo plan, and decides that you would really like being on this plan. All this without asking you first - in fact, you only discover it months later when you notice the charge on your card statement.

In terms of contract law, it seems to me like Netflix has no basis for expecting you to pay the subscription fee, because a contract cannot be said to have formed without consideration on your part.

The problem is that they are not demanding that you pay the fee. They can just go ahead and charge it to your card. The burden then rests on you to prove that you never agreed to this subscription, and ask for a refund.

In a situation like this, what law (if any) would the merchant be breaking by charging a small subscription fee to someone's card without their agreement? What process is available to someone on the receiving end of this - would they have to go to small claims court and would they be expected to produce evidence that they didn't agree to the subscription (proving a negative)?

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  • Sounds awfully similar to the question: law.stackexchange.com/questions/99293/…
    – AlanSTACK
    Commented Feb 5 at 10:10
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    @AlanSTACK similar but not the same: here we have an active act of turning on a lapsed subscription while the other was a failure of the subscriber to cancel.
    – Trish
    Commented Feb 5 at 10:40
  • I think the way something similar to that would play out in practice is if beforehand you have a subscription for Netflix for zero dollars per month. Netflix changes the conditions and informs you it will do so at some point in the future. You may cancel your subscriptions because of the change of terms but if you do nothing Netflix assumes you would like to switch to the new contract at $10/mo and does so. Afterwards you are a subscriber to the new contract. Not very nice but legal if they informed you properly.
    – quarague
    Commented Jul 3 at 8:08
  • I don't think you have to prove that you never agreed to the subscription, Netflix has to prove that you did. When you dispute a charge with a credit card provider, they normally take your word for it ("the customer is always right").
    – Barmar
    Commented Jul 3 at 16:49

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Unjust enrichment

If there is no contract giving Netflix a right to the money, this is unjust enrichment.

Unjust enrichment has three elements: (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment. The existence of a contract would be a juristic reason for the enrichment, precluding a finding of unjust enrichment. See generally Pettkus v. Becker, [1980] 2 S.C.R. 834, 844.

The onus is on the plaintiff to show there was no contract. See Garland v. Consumers' Gas Co., 2004 SCC 25, para. 44.

Consumer-protection legislation

Most consumer protection legislation also protects consumers against charges for unsolicited goods or services. See e.g. British Columbia's Business Practices and Consumer Protection Act, s. 14, which says that a consumer who pays for unsolicited services may demand a refund from the supplier.

Other out-of-court remedies

There are often out-of-court avenues available when an erroneous charge is made to one's credit card like disputing the charge to the merchant or to the card provider.

Fraud

You have stipulated a particular state of mind on the part of the merchant. You say that the merchant "decides that you would really like being on this plan." If that is in fact the reason the merchant subscribed a person (as opposed to technical error, accident, misunderstanding of subscription status, etc.) this could very well also be fraud.

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